Federal appeals court sides with ArvinMeritor

ArvinMeritor Inc. won what may be a costly victory when an appeals court ruled it didn't infringe on Eaton Corp.'s truck transmission.

The U.S. Court of Appeals for the Federal Circuit reversed a Delaware district court jury's ruling that ArvinMeritor's Engine Synchro Shift transmission violated Eaton's partially automatic transmission. Both products are for heavy-duty trucks.

ArvinMeritor of Troy, Mich., argued that the lower-court judge defined Eaton's patent too broadly and ignored much of the patent's description. The appeals court agreed and reversed the jury's verdict. "They were just picking a few words out of a claim," says Lee Murrah, chief intellectual-property counsel at ArvinMeritor. "Once the judge made his ruling interpreting the claim, this breathtakingly broad interpretation, the jury really couldn't reach any other conclusion."

While ArvinMeritor won the case, it wasn't able to sell a new product for several years because the lower-court judge issued an injunction for the duration of the trial. The case was filed in July 1997.

ArvinMeritor's ability to recoup the investment in r&d of the transmission system was stymied. The company isn't sure whether it's practical to reintroduce it, says Rick Martello, president of ZF Meritor, a joint venture created in 1999 to build truck transmissions. ArvinMeritor will service the ones it sold, whether or not it sells the product again.

Eaton of Cleveland says it was disappointed in the decision and will ask for reconsideration.

Eaton argued that because both systems manipulated fuel flow to reduce torque before shifting, ArvinMeritor violated the patent.

But ArvinMeritor argued that its system was fundamentally different. Eaton's system was a fully automatic transmission in the higher gears. With ArvinMeritor's system, the driver hit a button on the gear shifter to shift instead of using a clutch.